Times Square, 1977. After his early successes managing the Hi-Hat and French Parlor, Vincent is now proprietor of a new mob-backed disco, The 366, while his girlfriend Abby has brought the nascent punk-rock culture into the Hi-Hat. Vincent's twin brother Frankie remains a problem, "borrowing" money from Show Land, the sex emporium he manages, to pay off his debts.

Candy, now a "triple threat" as a porn actress, producer and director, is looking to make more artful, ambitious adult films, over the objections of her collaborator Harvey.

C.C. pulls a con on Bernie Wolf, director of a porn film starring Lori, to get her more money. Hoping to launch a more upscale gay nightclub, Paul looks to sever mob ties from his current bar.

Alston, now a homicide detective, is approached by Gene Goldman, a civil servant appointed by Mayor Koch to clean up Times Square.